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FS fairly presented in all material respects (YES (Unmodified audit…
FS fairly presented in all material respects
YES
Unmodified audit opinion
ISA 700
unqualified opinion (including emphasis of matter and other matters paragraphs ISA 706
NO
Modified audit opinion
Misstatements material, but not pervasive
(par 7)
Disagreement with management (par 7(a))
Qualified opinion
eg. inventory materially misstated
Limitation of scope (par 7(b))
Qualified opinion
Misstatements material & pervasive
Disagreement with management (par 8)
Adverse opinion
eg. client applied acc policies not consistent with acc standards & widely affect several accounts in FS
Limitation of scope (par 9 + 10)
Disclaimer of opinion
eg. most of client fin data destroyed in fire
disagreement with management = able to obtain audit evidence
limitation of scope = unable to obtain audit evidence
REPORTING
Audit report & opinions
[ISA 700 revised]
Introductory paragraph
Auditor's opinion
identify entity whose AFS audited
state = AFS audited unless disclaimer
title of each statement in AFS (SFP, OCI, SCE)
refer to notes + accounting policies
date covered
Basis of opinion
audit conducted ito ISA
refer - section audit responsibilities
statement: complied with all ethical requirements, specifically
independence
auditor exercised professional scepticism throughout audit
audit evidence sufficient & appropriate
included for all auditor's opinions
Going concern
material uncertainty separate section:
Material uncertainty related to going concern
ISA 570: require = separate section
Key audit matters
ISA 701
Other info
ISA 720
Responsibilities of FS
explicitly communicate:
who responsible for preparing FS
going concern basis appropriate
Auditor's responsibilities
explicitly state;
objectives of audit
*reasonable assurance = high level of assurance
misstatements arise from fraud/error & are considered material
key audit matters communicated with TCWG
ISA 700 par 41
Other reporting responsibilities
1 more item...
Going concern
[ISA 570]
Use is appropriate
(par 22)
MULTIPLE
uncertainties
disclaimer of opinion [ISA 705, IE 5]
Material Uncertainty
NOTED
inadequate disclosure
Adverse opinion (entity omitted disclosure) [par A.32 IE 3]
qualified opinion (incomplete disclosure) [par A.32, IE 2] :
adequate disclosure
unqualified with "material uncertainty related to going concern" [par 32, IE 1]
NO
material misstatement
unqualified audit opinion
Use is
not
appropriate
(par 21)
adverse audit opinion
Going concern
vs
Factual insolvency
Companies Act
S22: Reckless trading prohibitated
constitute
RI
co is factually/commercially insolvent - danger exist
intention to defraud
S4: Solvency & Liquidity test
liquidity indicates - commercial solvency
solvency indicates - factual solvency